Years ago, I found myself sitting in law school in Moot Court wearing an oversized itchy blue suit. It was a horrible experience. In a desperate attempt to avoid anything like that in the future I enrolled in a tax course. I loved it. I signed up for another. Before I knew it, in addition to my JD, I had a LL.M Taxation. I needed only to don my cape…. taxgirl® was born. Today, I live and work in Philadelphia, PA, one of the best cities in the world (I can't even complain about the sports teams these days). I landed in the City of Brotherly Love by way of Temple University School of Law. While at law school, I interned at the estates attorney division of the IRS. At IRS, I participated in the review and audit of federal estate tax returns. I even took the lead on a successful audit. At audit, opposing counsel read my report, looked at his file and said, “Gentlemen, she’s exactly right.” I nearly fainted. It was a short jump from there to practicing, teaching, writing and breathing tax.

Delayed Tax Refunds, TC 570 And An Important Distinction

By the stats, the current tax season has been quite a success. The Internal Revenue Service is reporting that, despite an abbreviated season, they are processing tax returns and issuing tax refunds at a much faster pace than last year.

Of course, all of the numbers in the world don’t matter when the one number you’re counting on – your own refund – is affected.

This season, I’ve heard from a number of taxpayers experiencing tax refund delays (though certainly nothing near last year’s education credit snafu). Initially, the trouble seemed to focus on those 1121 codes. The IRS was made aware of the problem and did issue a statement, saying:

A very small percentage of taxpayers may see an 1121 reference number if they check “Where’s My Refund?” after they initially were provided a projected refund date by the tool. The IRS is aware of this situation, and emphasizes that the small group of taxpayers who see this reference number should continue checking Where’s My Refund for an update. If we need more information to process their return, we will contact them — usually by mail.

Most of the taxpayers who reached out to me regarding the 1121 issue – including Donna – have since reported that they’ve either received their refunds or updated information about the delay.

However, shortly after the 1121 issue was made public, the focus from taxpayers on social media – and in emails, direct messages and private messages to me – has zeroed in on another code that’s popping up over and over: TC 570. There is a notable difference between the 1121 code and the TC 570: the latter is not an explicit refund code. It appears not on the “Where’s My Refund?” tool but on a taxpayer’s transcript. That’s an important distinction.

I reached out to IRS to find out whether there was any sort of systemic issue causing taxpayers to see a TC 570 on their transcript. So far, the answer to that question is no. The IRS is, however, clearly aware of the concerns and had this to say:

A Transaction Code 570 can mean different things in different cases so a taxpayer should not try to draw a conclusion based on the presence of a TC 570. The Transaction Code 570 will stop a refund from being issued until the impact of the action being taken on the account and the refund is determined and processed. Transaction Codes are used internally by the IRS to identify a transaction, adjust and research tax accounts and to maintain a history of actions posted to a taxpayer’s account. While they are reflected on transcripts they are not reflected on most public facing documents or tools like Where’s My Refund because they are difficult to interpret and can have different meaning depending on the case and associated codes and files. Again, the best way for taxpayers to check the status of their refund is by going to Where’s My Refund.

It’s a statement worth repeating. The IRS uses a lot of internal codes on transcripts and they can mean different things. And what it means exactly isn’t always apparent to the person taking the call at IRS. Does that suck? Of course it does. Trust me. I’ve been on the end of those calls trying to decipher what’s going on for taxpayers. And I totally believe that taxpayers are calling IRS and getting two or three different answers about the status of their refund. And I believe that taxpayers deserve a better answer.

But I would caution taxpayers not to try and pick apart their tax transcripts in an effort to find answers. There is no “one size fits all” answer to the TC 570 – not even in the best of circumstances. It does not necessarily equate, as some have surmised, an audit. Nor does it means, as others have posited, that the refund is subject to an offset. It could mean those things – but again, you’re not going to be able to tell from a glimpse at your transcript this early in the season.

It reminds of me of this great scene in The Princess Bride:

Those codes? They don’t always mean what you think they mean.

I know that isn’t the answer that taxpayers want to hear. And trust me, I am continuing to pester IRS about these issues (believe me when I say that they have my number). But it’s not a certainty that a TC 570 on your transcript is anything sinister at this stage of the season. The data doesn’t appear to support it. And if there’s a real problem with your specific return, you’ll hear from IRS.

And yes, there have been problems. I have confirmed reports that a glitch in at least one program has resulted in the issuance of paper checks instead of direct deposit. Errors – mostly transposition of numbers – have slowed processing of other returns. There have been bounces for bad addresses. Returns have been held because of prior years when no returns were filed. And yes, identity theft continues to be a big problem especially when Social Security numbers for dependents have appeared on more than one return. Clearly, not everyone is having a smooth tax season.

By the numbers, however, most taxpayers are getting their refunds as quickly as anticipated. On average, the IRS expects to issue tax refund checks to 9 of 10 taxpayers in 21 days or less. Those are pretty good odds. But that still means that 1 in 10 taxpayers will receive refund checks after that 21 day window. That sounds like a pretty small number until you calculate the total against the number of refunds issued. The IRS expects to process about 140 million tax returns this season. In 2013, they issued more than 100 million tax refund checks. If 1 in 10 taxpayers get their refunds after 21 days, that still works out to about 10 million taxpayers. That’s more than the individual populations of 42 states. It’s more than the combination populations of Alabama and South Carolina, the 23rd and 24th most populous states. So, yes, it’s a lot. But the number of taxpayers who do receive their refunds within that 21 day window? That’s more than the combined populations of our most populous states (California, Texas and Florida) or more astoundingly, the combined population of 25 of our least populous states.

Does that help those taxpayers who are depending on refund checks that have not yet been deposited? Of course not. I know you want your money. And I know that in many cases, you’re depending on that money. But work through the right channels. Keep checking the “Where’s My Refund?” tool for information. If you are advised to call the IRS, do so. If you get mail from IRS, open it. But at this stage, it truly is a waiting game. If I hear anything further (and I am pursuing these issues), rest assured that I will post it as soon as it becomes available.

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Tax Girl, thank you for for helping us in the 570 club! (I’m one of the many folks who emailed you for help.) I have *two* 570 codes, with a date of 3/10, and a cycle date of 20140803 (a.k.a. 2/24/2014). I have no 971 code (a.k.a. letter sent).

Strangely enough, I received a letter from the IRS dated 2/24/2014. In it, it the IRS stated they needed more information to process my return, but needed no information from me (which I found odd). When I called the IRS, the rep stated they only needed to verify my income with my employer. I spoke with my employer about this, and she said she had received nothing from the IRS. No letter; no phone call. Now I’ve heard this could be a stall tactic to help the IRS get through all the manual reviews caused by the computer glitch. Then I found this comment on Facebook, from a poster named Shayla McWillis:

“We all have to wait it out and see. Others (sic) info is great but let’s remember, every case is different. Many people I know received a 571/846 AFTER WMR updated and others updated AFTER they received $$$. All cases are different. I was told by a rep that 570 only (no 971) meant that we had been reprocessed and as long as there’s no 971, then we have nothing to worry about, it would just take an extra 1-2 weeks from your acceptance date. If you show 2 570′s that means yours took an extra 2 weeks and will fall off 6-7 days after the last code was received. If you receive a letter, than they MAY request further info from you. Don’t get stressed if WMR doesn’t update or you don’t get codes 571 or 846. Just watch your bank accounts. This is the penalty for filing early and nothing more. Keep the faith! Our money is coming!! — February 22 at 11:18pm” URL: https://www.facebook.com/igotmyrefund/posts/495132253929877

Have you heard anything like this Tax Girl? Thanks for looking out for us!

it’s not a stall tactic, they told you the truth. You’re caught up in possible id theft and the irs initially received no verification of your wages and withholding so they go out to the payer for proof of it on their letterhead. At this point since w-2′s & F1099′s can be faked and duplicated on today’s avg computers and printers the irs needs proof. The letter gets sent to the employers. I work these types of cases every day. It’s common and you can thank the id thieves for the mess. If you file very early there are chances of getting caught up in delays until all of the wage and income verification is reported to the irs. Sometimes these delays are due to the payers and not the irs.

Hello @agreyday! I’m sorry for not responding sooner, and thank you for your reply.

I called the IRS and they stated my two 570s are due to the fact that the IRS needs to verify my income. The agent said I would received a 4464c letter, which I did last week.

I heard from someone’s Tax Advocate that the SSA data tapes were late in processing. Could this be part of the reason for the income verification issues? I’ve also heard that recipients of W2s created from Quickbooks could have incorrect W2s. (I checked my W2 against my last paystub, and they match.) Have you heard anything like this @agreyday?

The codes and numbers are internal things for people that work at the irs. It helps us figure out what the particular problem is and how to fix it. I don’t see how any of it being available to the general public can be a good thing. Some info is in the internal rev manuals which are out there for the general public, but why read through that junk if you don’t have to? I certainly don’t enjoy having to do that for a living:)

Im a 570 as well was told buy irs and tax advocate as of feb 24th notice was mailed .well its march 15th still no letter. I was told no additional information needed at this time as well.oh if u dont have ure refund by may 3rd call us back.i efiled jan 31st bin fileing my own taxes sense 2008this Iis my 1st year to go threw this bs.and the irs said everything on my efile looks a ok cant tell me no more information until 60 days expire.think the irs are trying to withhold my refund .cause I offered to send additional information to speed up my refund .said not needed if I recieve a notice asking 4 additional information then I send it.i never received my 60 day review letter .I think cause I moved feb 4th is what caused my 570 I filled out form 8822 mailed it to California. Ill keep u all posted cause this is a bunch of bs if u ask me .guarantee if you owe them thy have no problem garnish, n are wages.

Agreyday due u work for the irs if so are you a ta cause all our information is right in front of the irs no jk u no this for a fact.i worked 4 ups last year and sum of this year can not see the employers withholding work info no jk.its a stall tatic gurantee it

Yes I work for tas. Try looking at the bigger picture. You said you moved, I said all income information isn’t available yet and the computer system is flagging possible fraudulent returns due to bilions in id theft. The irs processes 200 million tax returns a year. They didn’t pick yours’ or single yours’ out, there is something that caused a problem. No one from tas will tell anyone to wait 60 days. Call back and have them accept your case in as a hardship due to the delays you encountered. I could care less if you stop filing, that’s your choice.

Agreyday also 700,000 people have 570 on there transcripts find tht funny.i find this suspicious 4real .the irs will have to due there own homework on my refund I offered to help speed up the process treated me like they can give a fuck about my refund. Well ill make sure not to ever file my w2 w2or my 10999 ever again fuck pay in to not get my refund in a timely fashion back.knowing god dam well all tax payets info is right in front of them.

Thanks for this article. Filed and accepted electronically 3/1/14 and one month later, I’m still waiting to receive my refund. For days Code 152 has been listed. Aggravated and frustrated. I’ve been filing electronically with direct deposit for years. Just points to the utter inefficiency of the IRS.